Jimmy Deenihan (Kerry North, Fine Gael)

On another matter, page 96 of the plan refers to the income tax exemption on patent royalties. This will have a detrimental effect on enterprise. If the tax relief measures relate to the removal of the income tax exemption on patent royalties, it certainly will cost this country. This provision has been a significant driver of innovation and growth within many Irish companies and for inventors resident in Ireland. If a company develops the product and gains patent royalties as a result of the sale of a product, it means the inventors can receive a share of that royalty tax free. The company must develop the product which results in the employment of high-skilled individuals and each of these individuals must pay income tax on his or her salary. The innovation must be of such significance that it is patentable and significant costs are incurred in the patenting process. The benefit of patenting the invention is to protect it from being copied and to ensure the economic benefit goes to the inventing company and, therefore, to the Irish economy.

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